Bangladesh has near-zero tariff access to India under SAFTA. However, structural constraints such as infrastructure bottlenecks, regulatory and procedural barriers, institutional fragmentation, political-security frictions, and weak multimodal integration produce persistent non-tariff barriers that hamper bilateral trade. Addressing them will reinforce India’s connectivity in the Northeast, reduce dependence on the Siliguri Corridor, and deepen economic interdependence.

India and Bangladesh share a 4,096.7 km land border and maintain one of South Asia’s most significant bilateral relationships, underpinned by close geographic proximity, deep historical ties, and extensive economic and people-to-people linkages. With nearly 90 per cent of its land border shared with India, Bangladesh is often described as ‘India locked’,[1] making connectivity and transport cooperation mutually dependent.

Following the ouster of Prime Minister Sheikh Hasina in August 2024, India–Bangladesh relations deteriorated under the interim government, leading to the suspension or reassessment of several bilateral initiatives.[2] Internal political turbulence has since stalled connectivity projects and rendered bilateral coordination increasingly unpredictable. Further, reciprocal trade restrictions have intensified existing non-tariff barriers and increased procedural uncertainty, disrupting bilateral land trade.[3]

The Evolution of Bilateral Land Connectivity

The 1972 Trade Agreement laid the foundation for commercial cooperation between India and Bangladesh. The agreement advocates expanding economic and trade cooperation without preferential tariffs.[4] Bangladesh also enjoys zero-duty market access on most tariff lines in India under the SAFTA framework for Least Developed Countries (LDCs).[5]

India has extended Lines of Credit worth US$ 7.862 billion to Bangladesh.[6] The country is also central to India’s regional connectivity ambitions, such as the BBIN MVA and BIMSTEC. Road, rail, energy, and digital networks have deepened cross-border links in the region, with Dhaka as a key partner. Bangladesh’s close geographical proximity to India’s Northeast and the Siliguri Corridor, paired with the porous international border, makes it strategically valuable to India’s national security. As a result, deeper economic integration and interdependence can reduce interstate tensions, while a dense road network strengthens regional connectivity and border management.

Despite sustained bilateral investments in connectivity, the operational performance of India-Bangladesh land trade remains subpar. Bilateral trade has remained stable at approximately US$ 12.37 billion in 2025–26[7], yet trade flows remain heavily concentrated in a small number of crossings, with the Petrapole–Benapole corridor accounting for nearly 70 per cent of land-based trade (by value).[8] The pattern indicates that the principal problem is therefore not a lack of connectivity in absolute terms, but the limited ability of existing connectivity infrastructure to operate as an integrated trade network.

While strong economic interdependence continues to sustain cross-border trade in critical commodities, exporters remain heavily dependent on road transport as rail and other multimodal alternatives lack adequate operational and logistical integration. This suggests that the principal constraints to bilateral land trade arise primarily from structural non-tariff and trade-facilitation barriers embedded in border administration, logistics, and regulatory institutions rather than from tariff policy itself.

Structural Sources of Non-Tariff Barriers

Legacy non-tariff barriers affecting India–Bangladesh land trade fall into five mutually reinforcing categories: border infrastructure bottlenecks, regulatory and procedural barriers, institutional fragmentation, political-security frictions, and weak multimodal integration. These barriers operate at both formal and informal levels: while some arise from regulations, infrastructure and institutional design, others emerge from the behaviour of intermediaries, labour organisations, transport networks and local political actors operating around border infrastructure.

In practice, these constraints reinforce one another rather than operate independently. For example, improvements in road infrastructure along the Petrapole–Benapole corridor should reduce congestion and transit time. Yet their benefits remain limited, as some customs procedures remain unchanged.[9] Likewise, regulatory harmonisation at land ports such as Srimantapur or Sutarkandi cannot improve trade efficiency when political disruptions–including the reciprocal trade restrictions imposed in 2025–continue to disrupt supply chains. Inadequate infrastructure prolongs transit times and raises logistics costs. Table 1 depicts the status of select border trade corridors and the structural Non-Tariff Barriers affecting corridor performance in 2026.

Table 1. Status of Select Border Trade Corridors

Sabroom ICP remains underdeveloped[10]; Bangladesh’s Ramgarh facilities halted[11]; delayed after post-2024 political instability. Sabroom ICP ready; operationalisation expected after bilateral normalisation.

The 2018 agreement and SOP remain in force, and India continued trial/transit movements in 2025[12]; the May 2025 Indian restrictions through NE land ports materially constrained the corridor’s reverse/export flows.[13]

Bangladesh, India and Nepal participate; Bhutan remains an observer. IT, insurance and regulatory systems pending.

Dawki–Tamabil Corridor

Trade and passenger movement continue; ICP under construction[14]; briefly affected by 2025 restrictions.

Trade declined after 2025 restrictions; institutional gaps persist; Total trade fell from ₹307.16 crore in FY2024–25 to ₹242.30 crore in FY2025–26.[15]

DGFT measures explicitly curtailed goods entering through ICPs/LCSs in Tripura, including Srimantapur[16]; non-restricted goods continue; temporary visa disruptions occurred in late 2024.

Trade continues, but customs delays, truck congestion, and 2025 import restrictions have reduced efficiency.[17]

Political instability delayed operational protocols; infrastructure work on the........

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